LONDON (dpa-AFX) - Bank of England policymaker Michael Saunders said it would be appropriate to maintain an expansionary monetary policy stance and possibly to cut rates further to reduce the risks of a sustained undershoot of the inflation target.
With limited monetary policy space, risk management considerations favor a relatively prompt and aggressive response to downside risks at present, Michael Saunders said Wednesday.
The UK economy has remained sluggish and the most likely outlook is a further period of subdued growth, he noted.
'It is possible that we cut rates now and then find that the economy rebounds and renewed tightening is appropriate, say a year from now. I don't think such a quick reversal is likely, but it is not inconceivable,' said Saunders.
'The UK is not currently in a low inflation trap: the MPC has not exhausted its policy options, and inflation expectations are not unusually low,' he added.
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